UK Chancellor George Osborne’s Budget yesterday informed the nation that by 2018 national debt will have doubled since 2010, whilst the welfare state and living standards have been crushed.  If debt is going up, and services are being cut, where is the money actually going?

 Short History of UK National Debt

National Debt was a facility created by the development of bills and bonds on the 17^th century.  It provided a way for governments to finance wars. It is recorded in £’s but it is also important to see it as a percentage of GDP.  This is important because debt is not significant without understanding how it relates to our income.

Funding World War I meant the debt shooting up to £7.4bn (127% of GDP) between 1914 and 1919. The following two decades saw the Wall Street crash in the 20’s, followed by the recession…